The Foreclosure Report

Loan Payments Greater Than Incomes: CA

The Central Valley Business Times. "A softening home market is not by itself to blame for the jump in California home foreclosures says a San Diego attorney who specializes in helping those faced with losing their homes. 'I’ve had a number of people in this last month – this is completely unbelievable and so foreign – their mortgage payments are more than their income,' Mr. Brady says."

"He says in some cases it appears that mortgage brokers faked income for the applicants so they would qualify for mortgages. 'The homeowner should never have gotten the loan. Somebody’s made fees off of this thing and I think some of these lenders are so anxious to get their money loaned out that they do what they call ‘stated income,' he says."

"'The lenders don’t care. You’ve got janitors that are out there with $450,000 loans,' he says. 'The lenders should know that janitors don’t make enough to support that kind of loan.'"

"One of his clients who is in foreclosure makes about $5,000 a month but on the loan documents someone wrote in that his income was $11,000 a month, Mr. Brady says. 'So the lender goes ahead and grants the loan and now the guy can’t pay it,' Mr. Brady says.'"

"He says a number of his clients are choosing to lose their homes through foreclosure because they cannot refinance or sell in a market where sales are slowing and mortgage rates are rising. 'I’ve had a number of clients that have refinanced their property in the last year or two. They’ve pulled all their equity out of it and they’ve used their house kind of like a credit card. Now there’s nothing left. Some of those are choosing just to let it get foreclosed on,' Mr. Brady says."

posted by Ben Jones @ 3:39 PM